CVS agrees to $2 million settlement in price-scanning case

CVS/pharmacy Inc. has agreed to pay more than $2 million to Ventura, Riverside and Los Angeles counties to settle a lawsuit alleging it overcharged customers for sale items and engaged in misleading advertising, prosecutors announced Friday.

The Rhode Island-based corporation did not admit wrongdoing or liability in the agreement, which also formalized new auditing and employee-training measures to ensure accurate prices, according to a company statement.

Filed in Los Angeles County, the lawsuit alleged CVS charged more than advertised prices for sale items and failed to provide immediate discounts that were advertised, according to a statement from the Ventura County District Attorney's Office. An investigation determined charges routinely exceeded advertised prices beginning in 2006, prosecutors said.

The investigation began after Ventura County Weights and Measures officials and the state Division of Measurement Standards brought the issue to the attention of authorities around 2007, said Linda Groberg, a senior deputy district attorney.

Officials determined it would not be feasible or cost-effective to provide restitution to individual customers, so CVS instead is being required to pay $300,000 to the state Division of Measurement Standards and $100,000 to the ITT Consumer Protection Trust Fund for the enforcement of consumer protection laws, Groberg said.

The $1.2 million in civil penalties CVS also agreed to pay will be split between Ventura, Riverside and Los Angeles counties, she said.

CVS agreed to pay an additional $420,756 in investigative costs to agriculture and weights and measures departments, she said. It also agreed to "initiate and administer" programs for three years to ensure customers are not overcharged, prosecutors said.

In an emailed statement, CVS spokesman Michael DeAngelis said the company entered into the agreement to "resolve allegations that some prices scanned at the register during checkout did not match the advertised sale price."

"Under this agreement, we will guarantee up to $2 off if a customer is charged a higher price for a product than what is advertised. Pursuant to the agreement, CVS/pharmacy worked cooperatively with the D.A. offices and did not admit any wrongdoing," he said.

CVS has agreed to pay millions in recent years to settle various lawsuits, including a $75 million settlement involving alleged illegal sales of cold medicine used to make methamphetamine, a $875,000 agreement with New York officials over sales of expired products and a $2.25 million settlement that followed federal charges of compromising customer privacy.